Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Current ratio (CA) or working capital ratio
CA = Current assets/Current liabilities (times)
Current ratio measures the short term solvency or liquidity; it signifies the extent to which the claims of short-term creditors are covered by assets. Current ratio is basically looking at the working capital of the company. Effective management of working capital ensures that organisation is running efficiently. This will ultimately result in increased profitability and positive cash flows. Effective management of working capital involves low investment in non-productive assets such as trade receivables, inventory and current account bank balances. Also maximum use of free credit facilities such as trade payables ensures efficient management of working capital.
Normal current ratio is around 2:1 however this varies within different industries. Low current ratio may indicate insolvency. High ratio may indicate not maximising return on working capital. Valuation of inventories would have an impact on the current ratio, as will year end balances and seasonal fluctuations.
The use of ratios
We will now look at some of the working ratios in detail and illustrate how they can be interpreted.
The new investment has been under consideration since the beginning of January 2008 when the new government of Gujistan first invited companies to submit their proposals to build a
Organisations involved in international trade and investment seek economic and political stability. For this reason it is prudent for those organisations to conduct a country risk
You borrowed $547,000 for the purchase of your new home. This loan carries an annual percentage rate of 4.85 percent. It will be paid off through equal monthly payments including
what is the applicability of an operating cycle in vegetable growing?
The Citilink Bus Company ("Citilink") was established in 2000 to operate a bus service across a city with 1 million inhabitants. The bus company was created by an indigenous busin
Acceptance Sampling is a statistical measure used in quality control. A company cannot test all of its products because of ruining the products, or the volume of products being ver
Hsve s Finsncial Econometrics project that needs to be done. It involves fitting AR(1)-Garch(1,1) model to two series of log returns and copulas, forecasting and Risk calculation
Published salary surveys indicate that Chartered Financial Analyst earn $65,000 more per year than their non-chartered counterparts. Over 100,000 people are taking this three year
The expected return and risk involved in making an investment are important factors considered by investors. The expected return of a business can be influenced
Question You want your portfolio beta to be 1.20. Currently, your portfolio consists of $100 invested in stock A with a beta of 1.4 and $300 in stock B with a beta of .6. You h
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd